Vodafone Group profits up

25 May 2004

Vodafone Group has reported an increase in turnover of 10pc to £33.6bn sterling and a profit increase of 19pc to £10bn sterling for the year. Within Ireland, the company saw a 12pc increase in turnover, with ARPU (average revenue per user) growing from €553 to €582 due to strong growth in data revenues, which now represent 20.5pc of service revenues, up from 19.1pc last year.

Across the Vodafone Group cashflow increased 65pc to £8.5bn sterling. The entire Vodafone group of companies signed up 13.7m new mobile customers in the year bringing the global total to 133.4m.

During the 2003/2004 financial year, Vodafone introduced commercial 3G services in seven European countries with the launch of the 3G/GPRS Connect Card in February. The company signed up 6.8m Vodafone live! users during the year as well as signing content deals with established brands like Warner Brothers, Sony Pictures Mobile, Sony Entertainment, UEFA Champions League Football, Tomb Raider and The Simpsons.

Commenting on the results, Vodafone Group chief executive Arun Sarin said: “These results reflect a strong operational performance with an excellent level of free cash flow generation. Our financially disciplined team continues to look for ways to strengthen our core business, delight our customers and increase returns to shareholders. With the advent of our Mobile Connect 3G/GPRS datacard and Vodafone live! with 3G, we are well positioned for a future of transition as we take the lead in expanding market boundaries through new technologies and industry partnerships. We remain committed to delivering increasing returns to our shareholders, demonstrated by a 20pc increase in dividends and a further £3bn sterling of share purchases, in addition to the £1.1bn sterling already expended.”

The Vodafone Group’s chief operating officer, Julian Horn-Smith added: “Strong customer growth and escalating take up of data services have driven double digit growth in revenues once again. Our ongoing efforts to drive cost efficiencies have offset increased competitive and regulatory pressures to further increase margins. Overall, these results demonstrate the underlying operational strength of the Group.”

In its outlook for 2004/2005, the company said it expects single digit customer growth that would mean similar single digit growth in mobile revenues.

The Irish market continued to have the highest levels of outgoing voice usage per customer and the highest data usage across its European mobile business. Operating profit in the Irish operations increased by 16pc due to increased turnover and improved operation efficiencies.

Vodafone’s Irish operations now have a 54pc share of the Irish mobile market and customer base of 1.86m people. Phase one of the company’s 3G licence obligation for the Irish market is understood to have been met on 1 May.

By John Kennedy